Wednesday’s Trading – 2/25/09

It’s very curious that Obama is on a mission to cut the deficit. Weren’t the Keynesians just arguing that we need to dramatically increase deficit spending to stimulate the economy and pass a gigantic stimulus bill? You know the rationale: it doesn’t matter what the government spends money on as long as money is injected into the economy. They could buy cars from GM and drive them into the ocean, and the jobs created at GM would still be a net gain for the economy. And now Obama is going to cut the deficit?

I’ll bet that nothing is cut from the deficit. In the end, money will be shifted from Republican constituencies to Democratic constituencies. Politics will be done as usual, and nothing to truly help the economy will be done as usual.

173 Responses to “Wednesday’s Trading – 2/25/09”

  1. Yerk says:

    Matt the results will not be made public. Therefore stocks rally :-)

  2. eli says:

    I think anything in the 60’s for SRS is a good position. Took profits at the open on it from Yesterday but back in with a partial buy at $67.8 a few minutes ago

  3. phil says:

    bought bgu at 22.09….waiting to sell when spx nears 785

  4. towelie says:

    JG, agreed on the volume…might watch for it to fall back to the neckline and see if we bounce off of it.

  5. phil says:

    bgu stop at 22.38

  6. junglegirl says:

    George, want another computer? I’m not liking mine too much today.

  7. George says:

    Will the bulls chicken out at the close?

  8. phil says:

    stopped out of bgu ,,made a few bucks …..

  9. dave says:

    If i wanted to get whipsawed, i’d go to a domanatrix. I wonder she has an appointment time available today ??

    Nope, too many bankers ahead of me.

  10. admin says:

    CNBC sez Obama will be speaking on the stress-test very soon.

  11. phil says:

    that did not feel like a c wave up….kind of weak….back to the drawing board

  12. junglegirl says:

    The 15 min tagged the 200. Can we fall now, please?

  13. George says:

    JG, is it the computer you don’t like or the charts it is printing?

  14. junglegirl says:

    George, lol. Maybe I should try trading upside down.

  15. dave says:

    George,

    DELL has fallen so much because it doesn’t do flawless EW counts. Prechter is using an Epson computer.

  16. admin says:

    The market is a bit impatient with Obama/Geithner…

  17. George says:

    That stress-test may be a stroke of genius. Depending upon the variables and requirements, all banks could be great. That would give them a confidence boost for the public and investors.

  18. dave says:

    JG,

    Seriously, you know what zig zags tell us about 5’s.

  19. George says:

    For example: Bank-in-crapper + bailout-money = not-in-crapper.

  20. Yerk says:

    Has anyone seen a detailed description how this stress test is being done? Which models are used? The banks’ internal models? ROFL – we already had that experience. The regulator’s model? Regulators don’t know what a model is. How are they going to value CDS? Afaik pricing models for these things are questionable. Or will everything be put into level3, model-to-myth applied and the test passed? Obscurity does not instill confidence, although it seems Wall Street considers loss of confidence bullish.

    Somehow the last rally from 740 was a bit more impressive.

  21. Buzz says:

    I smell chicken poop, George

  22. George says:

    JG I bot SKF, hope it helps.

  23. Yerk says:

    George, both us are seeing the same ingenuity at work here :-)

  24. George says:

    Buzz, I think you’re right. We’ll know as soon as this next support area is hit.

  25. towelie says:

    Is it strange that when I envision the stress test I imagine Geithner with a whip making CEO’s jump through hoops of fire? (Benny Hill music theme in the background). I agree George, its all going to come down to how they interpret a few things. Go one way and everything is fine, go the other and we’re all screwed.

    In the grand scheme, I think this is nothing more than a delay game to see if the stimulus plan can do something (ANYTHING). What do they really have to lose in 6 more months if it all ends in some sort of “nationalization”? Why do it today when you can do it tomorrow?

  26. dave says:

    George,

    It’s good to see that you remember so much from your Winston Salem quantum physics courses.

  27. towelie says:

    Ah, I need to look at my other charts more often…that was about the 50% retrace of the most recent drop. There’s a nice double top on the SPY hourly…well, there WAS a nice double top.

  28. George says:

    dave, I went to USC (the South Carolina one). Our math wasn’t quantum physics, it was “want dem cheezits?”.

  29. dave says:

    towelie,

    Tilt your head; you can still see it

  30. dave says:

    George,

    My Columbia (SC) friend says it’s the real USC.

  31. George says:

    “Yeah, gimmie 50 dem cheezits”. Let’s see, naught plus naught equl… “how much is naught”?

  32. dave says:

    George,

    Commerce was filled today; you can stop your practice interviews…for now.

  33. George says:

    We didn’t have any grass on the football field because the cheerleaders (girlz and boyz) grazed it down to the dirt.

  34. towelie says:

    well now it looks like a double bottom…maybe I tilted too far. ;)

  35. George says:

    Thank goodness dave, I was so worried!

  36. Buzz says:

    Hard to tell whether it was support or the clock that stopped the downdraft

  37. dave says:

    George,

    Right, you were worried that you WOULD get it. JFK said that DC was a town of northern charm & southern efficiency.

  38. admin says:

    CNBC is reporting that Geithner, earlier in the day, put out a term sheet for the mandatory convertible proffered shares the government will buying. Maybe the stress test is just to determine which banks will be forced to issue those shares.

  39. George says:

    Buzz, the support maybe because it stopped on the 15min 36MA.

  40. Buzz says:

    Loss of almost exactly 2% on SPX in the final 30 minutes of trading…don’t want to wait to hear about the stress test, I guess.

  41. admin says:

    JG,

    How is your computer looking now?

    Matt

  42. junglegirl says:

    dave, I thought zigzags were supposed to be common in 2s and rare in 4s for impulse waves. Maybe the true pattern is still a secret (from me at least).

  43. dave says:

    Buzz,

    don’t know if you’re a football fan. In Dec 06, this line was written about a Colts/ Jaguars game “The only reason the Jaguars didn’t go for 400 yards Sunday was the end zone kept getting in the way.”

  44. admin says:

    Futures dove gracefully after the bell and closed at 762.

  45. phil says:

    matt…. ..we may not have to figure out which wave is which……we may have the date of the low…….feb9 high at full moon…….turnaround tuesday yesterday feb 24 was the new moon……..next is the full moon on march 10…………..the question is……………. got moon??????

  46. Yerk says:

    George, you must have loved today. 7 swings of >10 spx points…

  47. junglegirl says:

    Matt, cloudy…. or maybe that was my crystal ball.

  48. dave says:

    JG,

    i don’t remember that at all. Would think that zig zags are often found before short 5’s & failed fifths.

    Couldn’t face another prolonged triangle or narrow multi-week trading range.

  49. George says:

    Yerk,

    add to that the other stocks, like the inverse, and it adds up to a good day.

  50. dave says:

    JG,

    dont’ feel we’re out of the woods yet, either, because trendline from yesterday wasn’t broken on the late dive.

  51. junglegirl says:

    dave, exactly. I thought about shorts just before the EOD selloff, but couldn’t make myself do it.

    I just checked Prechter, p. 44: “Within impulses, second waves frequently sport zigzags, while fourth waves rarely do.” That fits with 2s wiping out most (or all in the case of leveraged ETFs) of one’s profits (something I have unfortunately experienced–thus it got encoded into memory).

  52. dave says:

    JG,

    Thank you. It just doesn’t sound right for weak 5’s though.

    Btw, please see my 3:13PM. I just cannot see these as 2 or ii’s …..at all.

  53. junglegirl says:

    dave, maybe something will happen and it won’t be a weak 5. I’ll have to look at the 2s and iis tonight. Gotta run right now.

  54. dave says:

    JG,

    Thanks. I’ll be interested in what you think of 2 & ii’s instead of 4 & iv’s

  55. Hank says:

    Is today George’s birthday?
    Or was JG’s SGA oscillating?
    I shorted more SPY @ 77.92, which looked like a top tick for all of 7 minutes :) Cashed in @ 76.62 AH

  56. George says:

    Hank, WTG. Nice.

  57. admin says:

    The bank plan was released after the bell. Here is the WSJ story:

    http://online.wsj.com/article/SB123557705225772665.html?mod=testMod

    Futures rallied – all the way up to 764. So, the 5:30pm close was still a point below the SPX’s close. The XLF is at $8.00, so there doesn’t seem to be much of a reaction after hours.

  58. K says:

    SKF if i had been at home hit my fib line of 150.93!!!!!!!!!!!!!!!!!!! and bounced from there WOW :/

  59. Yerk says:

    Here’s a comment on the stress level in the test.
    http://blogs.wsj.com/economics/2009/02/25/bank-stress-tests-are-the-scenarios-dire-enough/

    RE will decrease more imo. Here is some data from Mr Shiller: http://www.businessinsider.com/shiller-house-prices-still-way-too-high-2009-2 Overshoot and collapse never ends at the long-term average.

    I wouldn’t call this a “stress” test… CRE anyone? And I’d really like to know how they calculate the stress in the derivatives, especially the level 3 stuff. Ridiculous.

  60. dave says:

    JG,

    Before i put aside my belief that we’re still in (3) which long-term is much more bearish than labeling it (5). I’m labeling early January as the beginning of 5 of (3) for SPX & DJI. One can clearly see a sideways, choppy multi-week corrective period for DJI & SPX from approx 1/20 to 2/9, which i’m labeling as ii of 5 of (3).

    Using 2/9 as the beginning of SPX iii of 5 of (3) one can see a very well defined second wave on 2/12 & 2/13 followed by six down days in a row before yesterday. Therefore, i cannot see us in a two wave of any degree, but instead a fourth wave yesterday & today.

    Btw, labeling us in (3) instead of (5) fits with P/E’s still being too high and gives the mkt more opportunity to reach an long cycle “undervalued” multiple befitting the economy.

    Regards

  61. towelie says:

    Exactly Yerk, this is all going to come down to the assumptions that are made. Those assumptions could turn this into something worthwhile or just another farce.

  62. Yerk says:

    Why can’t the stimulus money spent in a way that makes it possible to reach someone in Maine 3 days after snow has fallen… Power lines belong below the soil not below trees.

  63. dave says:

    Yerk,

    You want a “stress” test http://www.youtube.com/watch?v=EIawNRm9NWM

  64. Yerk says:

    dave, yes, let’s stay in wave 3 :-)

  65. Yerk says:

    dave, did this stress test include 9/11?

  66. dave says:

    Yerk,

    In a way he made a memorial to the Twin Towers many years before the trajedy of 9/11.

    I had dinner the day before Thanksgiving 1981 or 82 at http://en.wikipedia.org/wiki/World_Trade_Center#Windows_on_the_World_restaurant I asked our waiter if that was the Stature of Liberty that we were looking at. From our table it appeared to be about 4 inches high.

  67. George says:

    I’d get nose bleed if I was that high up and not in an airplane.

  68. dave says:

    George,

    When watching some program about megastructures, i think they said a bldg like the Sears Towers sways about a foot at the top. And that’s where we’re going to lease our offices, George !! We may have to Shanghai K & Yerk & others.

  69. K says:

    dave. as long as there is a rooftop observatory so I can see how the stars are lined up i’ll be fine staying on the swaying roof.

  70. dave says:

    K,

    bud, the stars may be below your feet. LOL

    Btw, it will be our job to carry Mrs. George’s packages when she goes shopping on http://www.traveladventures.org/continents/northamerica/magnificentmile.shtml

    Psst, don’t tell George, but i’m afraid of heights.

  71. K says:

    i certainly don’t like looking down so i refuse to take the job unless you provide skydiving gear. I’ll skydive from the office every afternoon

  72. junglegirl says:

    dave,

    @5:58… that’s where I have us, too. Still on (3). I understand the evidence for (5), but some things are out of place for me to call it that. Like you, I’m at 4 of 3 of 5 of (3).

    I don’t get the 2s, either. I wondered about it awhile back, but the time course is wrong, the scale is wrong, and 4s are a better fit for any number of reasons.

    For me, doing waves on INDU and anything else thinly represented can be misleading.

    A formula I wrote, stuck on one of my charts 8 trading days ago, and then forgot about got hit at today’s top, exactly. Man, I should review ALL of my charts. Even less sleep…. oh no!

  73. junglegirl says:

    dave,

    Do you still have your 1>3>5 scenario on radar? I’ll be watching the action at 735.46. Hopefully we violate it to the downside.